Pension Mode SMSF

When you start a Transition to Retirement income stream (a pension while you still work), there are certain minimum amounts to withdraw. The maximum amount is 10% of the account balance.

With the global financial crisis in 2009, these minimum percentages was lowered. This enabled Members to preserve more capital in the SMSF. These minimum percentages are set out below:

Age of Recipient

Percentage Factor

Under 65

4%

65 – 74

5%

75 – 79

6%

80 – 84

7%

85 – 89

9%

90 – 94

11%

95 or more

14%

Notes:

1.       The 4% minimum is the normal percentages that apply for minimum pension draw down

3.       Minimum amount calculated on 1 July each year for the transition to retirement regular payment

4.       In the first year of  the account-based income stream, work out the minimum payment pro-rata on effective days in the year

5.       Minimum amount to be rounded to nearest $10

6.       These minimum amounts are set out in the Superannuation Legislation

To start a Pension or Transition to Retirement, Trustees need to minute this decision. Please see a template of a pension commencement minute below

To read more on Pension payments from an SMSF, read the ATO booklet here:

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